* Miners drop to near three-month low
* Energy stocks drop over 2 percent
* Westpac posts 22 percent fall in H1 cash earnings
By Shreya Mariam Job
May 6 (Reuters) - Australian shares fell to a near two-week low on Monday as U.S. President Donald Trump’s threats to raise tariffs on Chinese goods erased hopes of a trade deal between the world’s largest economies, following months of negotiations.
The S&P/ASX 200 index fell 1.2 percent, or 74.5 points, to 6,261.3 by 0110 GMT having ended little changed on Friday.
U.S. President Donald Trump announced on Sunday that he would hike U.S. tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.
The comments come before another round of trade talks between China and the United States scheduled for Wednesday, which according to a Wall Street Journal article China is considering cancelling.
“What China’s response will be, whether it cancels – or sends – the delegation that was heading to Washington this week is going to be critical to the markets reaction over a longer time frame,” said Greg McKenna, founder of McKenna Macro, in a note.
The prolonged trade tensions between the world’s two largest economies has roiled global financial markets and caused growing concerns regarding a slowdown in global economic growth.
Financial stocks dropped more than 1 percent to a near two-week low. Shares of Westpac Banking Corp fell as much as 2.3 percent after the country’s No. 2 lender posted a 22 percent fall in first-half earnings, hit by a surge in customer refunds following a landmark inquiry into misconduct in the sector.
Shares of the other three “Big Four” banks fell in a range of 0.04 percent and 0.6 percent.
Material stocks shed as much as 1.1 percent to hit its lowest in nearly three months. Shares of global miner BHP Group fell 1.1 percent to a near two-month low, while its rival Rio Tinto dipped 1.3 percent.
Energy stocks fell as much as 2.5 percent to its lowest since Feb.1 with shares of Beach Energy and Worley Parsons losing 5.2 percent and 4.4 percent, respectively.
Meanwhile, the Aussie gold index rose 0.4 percent, recovering from a more than one percent fall on Friday as volatility in the markets push investors toward safe haven assets.
Shares of Ramelius Resources and Evolution Mining slid 3.4 percent and 2.3 percent, respectively.
New Zealand’s benchmark S&P/NZX 50 index fell 0.7 percent, or 79.24 points, to 9978.84 coming off a record high the index hit last week.
New Zealand listed shares of A2 Milk Company shed 3.3 percent. China is the biggest market for the firm’s products. Meanwhile, shares of utility firm Meridian Energy Ltd dropped 1.7 percent.
Reporting by Shreya Mariam Job in Bengaluru; Editing by Sam Holmes